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ICICI Securities Report
Sobha Ltd. achieved record Q2 FY24 gross sales bookings of 1.7 million square feet worth Rs 17.2 billion (up 48% YoY in value terms), aided by the company achieving over 1 msf of sales bookings in Bengaluru.
The strong performance in H1 FY24 with Rs 31.9 billion of gross sales bookings comes on the back of a strong performance in FY23 when the company had clocked its best-ever annual sales with gross sales bookings of 5.65 msf worth Rs 52.0 billion.
As per company management, demand continues to be resilient and Sobha plans to launch at least 4-5 msf of new projects in H2 FY24 (earlier guidance of 7 msf), owing to delay in approvals for a few launches in Bengaluru.
If the approvals for all the planned launches come through, Sobha is targeting 15-20% growth in gross sales bookings for FY24 (we model for sales bookings of Rs 57.8 billion in FY24E and Rs 61.1 billion in FY25E).
We maintain our 'Buy' rating with an unchanged SOTP-based target price of Rs 891/share.
Key risks are demand slowdown and rise in debt levels.
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